It’s “eat the tariffs” vs. “everyday low prices.”
President Donald Trump has put the spotlight on one of the largest U.S. retailers over whether prices are about to start ticking up because of the sizable tariffs that he has unilaterally enacted.
Walmart has indicated that consumers will soon start seeing higher costs as Trump’s tariffs have begun to take effect. And retailers broadly have tried to warn consumers about impending price hikes.
But the president has sought to aggressively counter those warnings, instead putting the blame for cost increases on U.S. companies and China, which still faces tariffs totaling more than 40% across the board on its exports to the United States. Trump has said he’ll call CEOs over the issue — something he has already done with Amazon founder Jeff Bezos.
The standoff between the president and Walmart now looms over the other major retailers reporting earnings this week, which include Home Depot, Lowe’s and Target, as well as the TJ Maxx and Marshall’s parent company, TJX. These companies may have initially felt Walmart’s signals about price hikes gave them cover to enact their own cost increases — but Trump’s remarks now put them at risk of also being targeted by the president.
On Saturday, the president used his digital bully pulpit to call out Walmart, posting on Truth Social that America’s largest brick-and-mortar retailer should insulate its customers from any price hikes.
“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump wrote on Truth Social. “Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”
Trump’s comments come at a nervy time for the U.S. economy. U.S. stocks opened slightly lower Monday morning after Moody’s downgraded the U.S. sovereign credit rating, a surprise move that hints at the ongoing fallout from Trump’s hectic tariff rollout. That helped send U.S. Treasury yields (how much it costs the U.S. to borrow money) sharply higher.
Walmart shares declined more than 1% Monday. In a statement, it said it would continue to work to keep prices as low as possible “for as long as we can given the reality of small retail margins.”
Trump’s comments may have reflected a recognition that American customers may soon start feeling a more significant impact from higher prices because of tariffs. The president was likely responding to comments Walmart Chief Financial Officer John David Rainey made to CNBC last week in which he said he expected the company to start rolling out tariff-related price hikes later this month, with more in June.
“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” he said. “It’s more than any supplier can absorb. And so I’m concerned that consumer is going to start seeing higher prices.”
In separate comments to investors, CEO Doug McMillon said higher food costs were likely in store as a result of tariffs hitting imports from Colombia, Costa Rica and Peru.
At least one Trump administration official already acknowledged Walmart is unlikely to eat the entirety of the tariffs’ cost — and denied the White House would force it to do so.
In an appearance Sunday on NBC’s “Meet the Press,” Treasury Secretary Scott Bessent said he spoke with McMillon. He said McMillon told him the retail giant would “eat some of the tariffs, just as they did in ’18, ’19 and ’20.”
Bessent rebutted the idea that he was applying pressure on Walmart to “eat the tariffs,” saying he and the CEO “have a very good relationship.”
“I just wanted to hear it from him, rather than second-, thirdhand from the press,” Bessent said.
Bessent suggested customers overall would remain insulated from inflation thanks in large part to lower gas prices.
But in a separate appearance on CNN, he said customers are still likely to face some cost pressures.
“Walmart will be absorbing some of the tariffs, some may get passed on to consumers,” Bessent said.
Recent economic data has suggested companies have been absorbing initial tariff costs. A report from the Bureau of Labor Statistics reported last week suggested American manufacturers and service providers had refrained from passing along higher U.S. duties on imports in April.
That may soon change — and as the nation’s largest retailer, any decision by Walmart to raise prices is likely to provide cover to stores of any size to likewise pass on some costs, experts say.
“If Walmart’s coming out — with its scale and its buying power and its focus — and saying prices are going to rise, everyone else is going to have to follow suit,” Neil Saunders, managing director at retail consultancy GlobalData, told NBC News last week. “Walmart is firing the starting gun on a period of price increases.”
